If you’ve ever taken a trip to Hawaii, you’re probably dying to do so again. Visiting Hawaii is like acquiring a rare kind of travel bug that has you daydreaming of lush waterfalls, balmy weather, and the unceasing beauty of Hawaiian shores.
Purchasing Hawaii Real Estate
Some people believe that buying property in Hawaii is impossible. In fact, anyone, including people from other countries, can own property in Hawaii. However, unless they have a green card, foreign owners cannot live in the property.
Many people, both citizens of the United States and foreigners, own investment property or vacation homes in Hawaii.
One way of investing in Hawaii real estate is to look for a real estate investment fund such as the one found at investinkona.com.
Fee Simple (Freehold) and Leasehold are the two types of ownership.
Foreign buyers must pay cash or have access to a mortgage with a US lender, who will require a minimum 25% -30% cash down payment.
Purchasing a single-family home or condominium is generally a simple process, but for the inexperienced buyer, such as someone buying their first home, it can involve many stumbling blocks and can seem to be a daunting task. After all, you’re probably incurring your first major debt. That, combined with the fact that you will be tied to this home for years to come, as the typical loan term is 15 to 30 years, scares most people.
However, there is a silver lining: purchasing real estate is an excellent method to accumulate personal wealth. Much of this country’s great wealth was built on land ownership. Furthermore, it is yours to do with as you see fit. You can decorate and/or renovate the space, paint the walls any way you want.
And the rent is never raised! As a result, the longer you keep the property, the better off you will be. You should also have built up equity within a few years, as property values tend to rise steadily.
Foreign Buyers of Hawaii Real Estate
The main issue for a foreign buyer is money. Many international lenders will not lend on US investments. Foreign owners must also prove their income, assets, and debts to qualify for a loan. Escrow will withhold 15% of the sale price for FIRPTA and HARPTA withholding. The seller must have a federal taxpayer ID number, such as an SSN, FIN, or TIN.
Foreign owners selling property in Hawaii are liable to HARPTA and FIRPTA withholding taxes. FIRPTA withholding increased from 10% to 15% on February 17, 2016. The real tax due is depending on the capital gains made on the property sale. Foreign sellers should keep in mind that escrow will hold 22.25per cent of the sale price.
